The Nonprofit Boardroom: Best Practices for Peak Performance

Frequently Asked Questions

• What are the most important responsibilities of a nonprofit board?

  A nonprofit board provides governance, strategic oversight, financial accountability, and support for the organization’s mission and executive leadership. Effective boards establish clear roles and expectations, participate in strategic planning, maintain appropriate financial and ethical oversight, and regularly evaluate their own performance. Just as importantly, board members understand the distinction between governing the organization and managing its day-to-day operations.

• What does a strong relationship between a nonprofit board and CEO look like?

  The strongest board-CEO relationships operate as constructive partnerships built on trust, transparency, clear roles, and mutual accountability. The board provides strategic guidance and oversight while giving the CEO appropriate authority to lead the organization. An effective board can also serve as a valuable resource for the CEO by providing expertise, connections, coaching, and access to broader professional networks.

• How can nonprofit boards improve board member engagement and accountability?

  Engagement begins with clearly communicating what board service requires. A board member agreement can establish expectations around attendance, participation, fundraising, ethical conduct, and other responsibilities before an individual accepts the role. Ongoing education, meaningful committee work, strong board leadership, and regular performance evaluations can further create a culture in which members understand how they contribute to the organization's success.

• What is the nonprofit board’s role when a CEO or Executive Director leaves?

  Executive transition is one of a nonprofit board’s most consequential governance responsibilities. The board should establish a thoughtful process for leadership succession, clarify decision-making responsibilities, and develop a communications plan for staff and other key stakeholders. Particularly when replacing a long-tenured leader, disciplined governance can help maintain trust and stability while positioning the organization to select the leadership it needs for its next chapter.

By Christie Angel, Managing Partner

When joining a nonprofit board, individuals often feel a sense of pride, honor, and appreciation for being asked to serve. The opportunity can be an avenue for improving skillsets, enhancing networks, and most importantly, contributing to the larger community in a meaningful way.

According to BoardSource, “Exceptional boards govern in constructive partnership with the chief executive, recognizing that the effectiveness of the board and chief executive are interdependent. The board is a powerful force supporting the organization, while the CEO sees the board as a strategic asset.”

Constructive Partnership

For boards to both support their organization and be the strategic asset that an organization’s leader can rely on, proper board governance is critical. It helps nonprofits operate effectively, fulfill their missions, and achieve their goals. Furthermore, a board that implements best practices will enhance the experience of its board members, boosting engagement and positioning itself to recruit fresh board talent in the future.

Lisa Courtice, President & CEO of United Way of Central Ohio, shares, “Without adherence to governance policies, board members too often gravitate toward wanting to assist with the management of the organization. Role clarification is critically important, including the oversight of the president & CEO.”

In my experience, there are seven best practices that signal a nonprofit board is both organized and effective:

• Clear Roles and Responsibilities. They define and communicate the roles and responsibilities of all board members, including expectations for attendance, participation, and fundraising. While this may seem elementary, spelling out these responsibilities and expectations sets the tone for proper engagement. Additionally, they have strong leadership within the board, with capable officers and committee chairs who facilitate strategic decision-making and oversee operations in a timely, efficient manner. ** *** Strategic Planning.** They engage in strategic planning sessions at a regular cadence. These are used to set long-term goals, establish priorities, and evaluate the board’s progress towards supporting the organization's mission.
• Transparency and Accountability. They maintain transparency in both financial and operational matters. This includes providing regular updates and utilizing strong financial oversight mechanisms — including regular financial reporting, budget review, and internal controls — to safeguard assets and ensure fiscal responsibility.
• Diversity and Inclusion. They foster diversity and inclusion within their board to bring a range of perspectives and experiences to the organization’s decision-making processes. In addition, they offer ongoing training and development opportunities for all board members to enhance the skills and knowledge relevant to their roles.
• Collaboration and Partnerships. They foster collaboration with stakeholders, community partners, and other organizations to leverage resources, share best practices, and maximize impact.
• Ethical Standards. They continuously uphold high ethical standards and a code of conduct for board members, promoting integrity, honesty, and respect in all organizational activities. They conduct regular evaluations of board performance, individual board member contributions, and organizational effectiveness to identify areas for improvement and address challenges proactively.
• Leadership Support. They act as a bridge between the CEO and a broader community of seasoned professionals. This includes providing access to coaches and membership organizations that both enrich the leader’s network and reduce the feelings of isolation that often plague them.

Fundraising and legalities are two areas where boards can be especially effective. At United Way of Central Ohio, the board has established a culture where giving is expected, a big support as the organization fundraises in celebration of its 100th anniversary. Courtice also cites the board's guidance in response to issues that present possible legal challenges. “Trustees regularly share their expertise or lend their business associates to advise us when trusted guidance is needed. For the most part, this guidance is provided pro bono,” says Courtice.

During my own tenure as a nonprofit executive, one of the best decisions we made as an organization was to adopt a board member agreement. This internal agreement serves as the promise that a board member makes when accepting a position for nonprofit board service. It documents their commitment to the organization and an understanding of their responsibilities. In turn, we, as an organization, provided an agreement back to our board members that memorialized our board norms, practices and ethics.

A practice like this can become especially helpful when the board is faced with critical decisions like replacing a long tenured leader. In cases like this, the board should develop a thoughtful communications plan to share the planned departure with all key stakeholders, including community members, that is shared with staff before it hits the media.

Emphasizes Courtice, “A board's commitment to establishing governance policies and procedures, and its fidelity to them, is essential to providing outstanding board leadership.”

By embracing these governance best practices, boards position themselves to not only propel the organization forward in a strategic direction but also empower their CEO, setting the organization up for long-term success.